2025 budget should communicate how govt will leverage technology to enhance tax administration

As the Finance Minister prepares to present the 2025 budget statement on Tuesday, March 10, the Institute of Progressive Governance (IPG) budget should communicate clearly how the National Democratic Congress (NDC) government will leverage technology to enhance tax administration, identify and register taxable persons and improve tax compliance in Ghana, without any form of tax increase.

Regarding structural reforms, IPG said the budget should communicate unambiguously how the government will operationalize Section 88 (2) (b) of the Public Financial Management (PFM) Regulation which seek to rein Entities to improve accountability and and transparency.

It explained in a statement that among other factors, closing the revenue mobilisation gap, accurately assessing tax liability, and improving tax audit are critical to ensuring effective management of public resources.

These are non negotiable triggers which the 2025 budget must comprehensively address, IPG said.

The statement ahead of the budget presentation said “As part of measures to mitigate the economic challenges facing the country, the NPP government introduced the Post-COVID-19 Program for Economic Growth (PC-PEG). A raft of fiscal and monetary measures were introduced to rein in expenditures and improve revenue mobilisation, including a cut in discretionary spending, a cut in the salaries of the executives, freeze on foreign travels, among others. Specifically, key expenditure measures including a reduction in the threshold on earmarked funds from the current 25% of Tax Revenue to 17.5% of Tax Revenues; 30% cut in the salaries of the President, Vice President, Ministers, Deputy Ministers, MMDCEs, and political office holders, including those in State-Owned Enterprises; Reduction in fuel allocations to Political Appointees and heads of MDAs, MMDAs and SOEs by 50%; and a ban on the use of V8s or its equivalent, except for cross-country travel.

“As we wait on the NDC government to present its budget to the 9th parliament, it is expected that, the above will be fully captured and implemented same given that the President, HE John Mahama promised to cut cost and thus reduce government spending. Therefore nothing short of this should be considered by the good people of this country. Again, the finance minister promised the people of this country during his vetting that he would increase government revenue as a percentage of gross domestic product (GDP) without necessarily increasing taxes. It is also expected that the minister, Dr Ato Ato Forson, will provide a policy direction and a clear path towards achieving this solemn promise. Most importantly, the budget should communicate clearly how the NDC government will leverage technology to enhance tax administration, identify and register taxable persons and improve tax compliance in Ghana, without any form of tax increase.

“Regarding structural reforms, we also expect the budget to communicate unambiguously how the government will operationalize Section 88 (2) (b) of the Public Financial Management (PFM) Regulation which seek to rein Entities to improve accountability and and transparency. Among other factors, closing the revenue mobilisation gap, accurately assessing tax liability, and improving tax audit are critical to ensuring effective management of public resources. These are non negotiable triggers which the 2025 budget must comprehensively address.”

Meanwhile, the President of the Ghana Union of Traders Association (GUTA), Dr Joseph Obeng, has told Finance Minister Dr Cassiel Ato Forson that traders are not expecting new taxes in the 2025 budget statement.

He said GUTA will welcome any move by the government to expand the tax net to cover people who do not pay levies.

“We’re not expecting new taxes. We’re also not going to be worried when new taxes are tailored to bring in people outside the tax net to pay. That one, we will not be worried. But what we will be worried about is just compounding the taxes on a few of us who pay.

“Expanding the tax net is welcomed. And whichever means they do to rope in a lot more people who are outside the tax net to come in is also welcome news,” he said.

The Ghanaian government has approved the 2025 fiscal policy document ahead of its official presentation to Parliament on March 11.

This decision, made during a special Cabinet meeting on Thursday, reaffirms the administration’s commitment to economic stabilization and sustainable growth.

Speaking to the press after the meeting, Minister of Government Communications Felix Kwakye Ofosu

 assured Ghanaians that the government remains committed to fulfilling its social and economic promises.

He confirmed that the fiscal policy will reflect the administration’s 120-day pledges, including the removal of the betting tax and COVID levy.

Additionally, the budget will outline the financial state inherited by the National Democratic Congress (NDC) government while offering hope and strategic policies for national development.